The Impact Of Business Sustainability And Entrepreneurial Spirit On The Financial Performance Of Msmes: The Moderating Role Of Mental Accounting

Authors

  • Sri Murni, Rahmawati, Ari Kuncara Widagdo, Sri Hartoko, Sri Mulyani, Mi’raj Akbar Pradianto, Agus Dwianto Author

DOI:

https://doi.org/10.64252/d66x0y66

Keywords:

Business sustainability, entrepreneurial spirit, financial performance, mental accounting, MSMEs.

Abstract

Business sustainability and entrepreneurial spirit are two internal factors believed to play a crucial role in determining the financial performance of micro, small, and medium enterprises MSMEs, especially amid the economic challenges faced by business actors. Drawing on the resource-based view theory, this study develops a model to explore the impact of business sustainability and entrepreneurial spirit on the financial performance of MSMEs, while also examining the moderating role of mental accounting in these relationships. Data were collected from 223 MSME owners and analyzed using structural equation modeling with SmartPLS to test the proposed hypotheses. The results reveal that both business sustainability and entrepreneurial spirit have a significant positive effect on the financial performance of MSMEs. Furthermore, mental accounting is found to moderate the relationship between business sustainability and financial performance, whereas no moderating effect of mental accounting is observed on the relationship between entrepreneurial spirit and financial performance. These findings broaden the understanding of the importance of managing business sustainability and strengthening the psychological aspects of financial decision-making to enhance MSME financial performance, and provide practical implications for business practitioners and policymakers in the MSME sector.

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Published

2025-07-02

Issue

Section

Articles

How to Cite

The Impact Of Business Sustainability And Entrepreneurial Spirit On The Financial Performance Of Msmes: The Moderating Role Of Mental Accounting. (2025). International Journal of Environmental Sciences, 531-543. https://doi.org/10.64252/d66x0y66